Reg Z ATR – Determining the Ability to Repay

Compliance > Regulation Z - TILA > Ability to Repay / Qualified Mortgages
Q:  Under the standard ATR rules, what must a creditor do to make a determination that the consumer will have a reasonable ability to repay the loan?
A:  A creditor must consider 8 specific criteria, including: 
  • income or assets,
  • employment status,
  • payment on the covered transaction,
  • simultaneous loans,
  • mortgage-related obligations,
  • current debt obligations,
  • monthly debt-to-income or residual income and
  • credit history.
A creditor must then generally verify the information that is relied on in determining a consumer’s repayment ability using reasonably reliable third-party records.

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